“Clearance Requirement Without Resignation” in Philippine Labor Law

1. What “clearance” means in Philippine employment practice

“Clearance” is an internal certification—usually on a printed or digital form—showing that an employee has • returned company-issued property, • settled cash advances or loan balances, • closed IT accounts, and • has no pending administrative case. In most workplaces it is part of off-boarding when someone resigns or is terminated, but many companies now ask for it even when the worker is staying (e.g., before a promotion, inter-department transfer, or long leave). This is the scenario covered by the phrase “clearance requirement without resignation.”

2. Governing legal framework

Source	Key rule relevant to non-resignation clearance
Labor Code of the Philippines (Arts. 113–118, 300-303)	Regular wages cannot be withheld or deducted except for causes allowed by law or written authorization. Clearances are not listed exceptions.
DOLE Labor Advisory No. 06-20 (13 Jan 2020)	Employers may impose clearance procedures only for the payment of “final pay.” The Advisory is silent on continuing employees, so the default statutory rules on wages apply.
Data Privacy Act of 2012 (RA 10173)	Personal information collected (e.g., NBI, barangay, or previous-employer clearances) must be proportional to a legitimate purpose; retention and disclosure rules apply.
Civil Code, Art. 1306	Parties may stipulate anything that is not contrary to law, morals, good customs, public order, or public policy; an overly burdensome or discriminatory clearance scheme can be struck down.
Constitution, Art. III §18 & Art. XIII §3	Protects the right to work and security of tenure; company policies that effectively force resignation through clearance hurdles may be unconstitutional.

3. Typical situations where employers ask for clearance even if you stay

Promotion or transfer – HR wants assurance that the employee leaves no loose ends in the former post.
Probationary → regular conversion – Some firms require a “mini-off-boarding” before issuing a regularization notice.
Project completion with immediate redeployment – Common in construction and BPO; each project’s property must be accounted for.
Preventive suspension – IT and security teams sometimes demand a property return while an investigation is on-going; the employee remains on the rolls.
Sabbatical or maternity leave – To limit liability for lost devices while the employee is away.
Site reassignment abroad – Workers in mining or maritime sectors may undergo an “exit” from local payroll and re-entry on an overseas payroll.

None of these circumstances automatically justify wage withholding; they only affect risk management, inventory control, or accounting.

4. Legal limits on non-resignation clearances

Issue	Rule	Effect
Withholding of salary	Under Art. 116, it is unlawful to refuse payment of wages on the ground that an employee has unsettled obligations, unless those obligations fall under an authorized deduction (tax, SSS/PhilHealth/Pag-IBIG, or written employee consent).	Regular and 13th-month pay must be released on the usual cut-off even if a pending clearance exists.
Unilateral set-off of debts vs. wages	SC in Prudential Guarantee & Assurance v. Reyes (G.R. 155701, 25 Jan 2012) allowed set-off *only for separated employees and only against final* pay**.	For continuing employees, set-off is invalid unless they sign a deduction authorization or the amount is adjudged by a court/arbiter.
Forced resignation / constructive dismissal	Imposing an impossible clearance (e.g., requiring sign-offs from resigned managers or from a branch in another island within 24 h) may amount to constructive dismissal.	Employee can file a complaint within four years and claim back wages, reinstatement, and damages.
Equal-protection & discrimination	Requiring clearances exclusively from union officers, pregnant employees, or those who filed a complaint violates Art. 134 & Art. 259 of the Labor Code, plus the Anti-Age Discrimination in Employment Act (RA 10911) or Safe Spaces Act (RA 11313).	Policies must be uniform or risk-based, not person-based.
Data privacy	Collecting NBI, barangay, or previous-employer clearances “just to have on file” lacks legitimate purpose; NPC Advisory Opinion 2021-002 warns against over-collection.	Employers can be fined up to ₱5 million plus damages for breaches.

5. Relevant jurisprudence (chronological)

Matling Industrial & Commercial Corp. v. Coros (G.R. 175575, 12 Aug 2013) – Wages cannot be withheld pending clearance; employer liable for monetary awards and attorney’s fees.
Prudential Guarantee & Assurance, Inc. v. Reyes (G.R. 155701, 25 Jan 2012) – Limited set-off allowed after valid separation.
PLDT v. Bolso (G.R. 168737, 20 Mar 2013) – SC frowned on policies making release of back-pay contingent on clearances that were never objectively evaluated.
Intercontinental Broadcasting Corp. v. Benavides (G.R. 169753, 6 Feb 2017) – Clearance cannot be used to defeat an NLRC award; employee’s money claims take precedence.
Petron Corp. v. Caberte (G.R. 182255, 15 Nov 2010) – Company may place employee on preventive suspension and retrieve property, but must pay wages after 30 days if no termination is issued.

6. Best-practice checklist for employers

Step	Practical tip	Why it matters
1	Publish a written policy that states when and why clearance is required even if there is no separation.	Transparency ensures the policy is not arbitrary and can withstand a DOLE inspection.
2	List accountable items & cash obligations exhaustively; avoid open-ended “any other liability.”	A vague catch-all is prone to abuse.
3	Give a reasonable timetable (five to fifteen working days) and identify an escalation path if a signatory is unavailable.	Prevents constructive dismissal claims.
4	Allow electronic sign-offs using the company intranet or e-mail.	Cuts cost and downtime, complies with the E-Commerce Act (RA 8792).
5	Separate wage processing from clearance for ongoing staff; if deductions are unavoidable, secure a fresh written authorization each time.	Complies with Arts. 113–114.
6	Limit third-party data collection to genuine business need (e.g., updated NBI only for sensitive posts).	Aligns with NPC Advisory_2021-002.
7	Document everything—acknowledgment receipts, e-mail threads, turnover sheets.	Critical evidence if the policy is challenged.

7. What employees can do when clearances become oppressive

Talk to HR first, reminding them of DOLE Labor Advisory 06-20 and Arts. 113–116.
Send a demand letter invoking the 15-day rule for money claims (Art. 304).
File a Single-Entry Approach (SEnA) request at the nearest DOLE Regional Office for mediation; many clearance disputes settle here in ≤30 days.
Proceed to arbitration before the NLRC if mediation fails; money claims up to ₱5 million and constructive dismissal cases are within NLRC jurisdiction.
Complain to the National Privacy Commission if excessive personal data are being required.
Claim moral and exemplary damages plus attorney’s fees if the policy was implemented in bad faith.

8. Key take-aways

Requiring a clearance per se is not illegal—it is part of management prerogative—but labor and privacy statutes restrict how it can be used when the employee has not resigned and is still earning wages.
Regular and 13th-month pay may not be withheld pending a clearance; only final pay after separation can be conditional, and even then the employer must finish the process within 30-days from exit.
A clearance policy that effectively coerces resignation or singles out protected classes runs afoul of constitutional guarantees and statutory prohibitions on discrimination.
Both employers and employees are well-served by a clear, proportional, and time-bounded procedure—one that protects company assets without infringing on workers’ rights.

This article is for general information only and not a substitute for legal advice. For specific cases, consult a Philippine labor-law practitioner or the nearest DOLE office.